Note on the Amendment to the Law of Mongolia on Minerals dated 1 July 2014
26 August 2014
On 18 August 2014, the Government of Mongolia brought to a close its campaign for 100 days of reform in order to kick-start the domestic economy and reverse the sharp decline in foreign direct investment. During that time, the government looked to reverse certain legislative enactments that had dampened foreign investor activity. The centrepiece of this campaign, naturally, was the mining sector.
To this end, the Parliament of Mongolia passed the Law of Mongolia on Amending the Minerals Law (the "Amendment") on 1 July 2014, amending the 2006 Law of Mongolia on Minerals (the "Minerals Law"). The Amendment introduces 13 new provisions and alters a number of existing provisions of the Minerals Law with the aim of improving the existing legal framework relating to mining. The Amendment became effective on 1 July 2014.
Simultaneously with the Amendment, the Parliament of Mongolia enacted the long-anticipated Law of Mongolia on the Repeal of the Law on Prohibition of Granting Exploration Licences (the "Prohibition Repeal Law"). The Law on Prohibition of Granting Exploration Licences (the "Prohibition Law"), which had been in effect since 12 January 2012, imposed a moratorium on the issuance of exploration licences. The Prohibition Law itself was the last in a long series of interim moratoria that the Parliament of Mongolia had been issuing since 17 June 2010. The Prohibition Repeal Law sent a welcome message to the business community that the Government of Mongolia had begun to adopt progressive measures to use the country's latent natural resources to reverse the troubled economy.
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